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Greece's parliament votes in favor of a referendum on creditor reforms

The Greek Parliament will vote Saturday on whether to approve a July 5 national referendum on a bailout deal, after Greek's development minister called on the financially beleaguered nation to reject it.

Greece's parliament has voted in favor of Prime Minister Alexis Tsipras' motion to hold a referendum on the country's creditor proposals for reforms in exchange for loans, the Associated Press reported. Tsipras and his coalition government have urged people to vote against the deal, throwing into question the country's financial future.

The vote is to be held next Sunday, July 5. It has raised the question of whether Greece can remain in Europe's joint currency, the euro.

Eurozone officials were bracing for the possibility of a Greek debt default next week after financial ministers rejected Greece's bid for a credit extension, Reuters reported Saturday.

Greece had asked for the one-month grace period as a Tuesday deadline loomed for when the government must pay 1.6 billion euros ($1.8 billion) to the International Monetary Fund.

The unanimous refusal came after Greek Prime Minister Alexis Tsipras's surprise announcement of a referendum on an offer from creditors that his government had rejected.

The swift rejection, Reuters reported, represented a startling demonstration of how Tsipras had alienated the rest of the currency bloc with a eleventh-hour announcement that derailed five months of talks.

The euro finance members blocked Greek Financial Minister Yanis Varoufakis from a meeting in Brussels and issued a statement, accusing the Athens government of breaking off negotiations, Reuters and The Wall Street Journal report.

"The current financial assistance arrangement with Greece will expire on June 30, 2015, as well as all agreements related to the current Greek (program)," the ministers said.

Earlier Saturday, IMF chief Christine Lagarde said that Greece's rescue creditors "will continue to work" for a deal to save the country, the Associated Press reported.

Lagarde said the creditors "always showed flexibility to adjust to the new political and economic situation in Greece," rejecting claims from Tsipras that his country was facing an ultimatum.

But Lagarde insists Greece needs to do more. "It requires a balanced approach, on the one hand there has to be structural reforms, deep ones, to change the Greek economy, to make it more productive, more efficient so that it generates growth and jobs."

Pierre Moscovici, the EU's economics and monetary affairs chief, said the differences between Greece and its creditors can be bridged, and he emphasized the importance of Greece remaining in the 19-nation euro bloc.

Before a eurozone finance ministers' meeting Saturday, Moscovici said "proposals are on the table. These proposals are favorable to Greece, favorable to the Greek people."

"I see that there are differences,'' Moscovici said, "but the differences are quite limited, and they are identified.

In advance of the Parliament vote, Greek government officials predicted that the country would scuttle a credit deal if the Parliament approved the national referendum for July 5.

The reported timing of the vote raises more questions than answers. European leaders had given Greece, and themselves, a Saturday deadline to reach a deal with Athens over loan repayments.

Two questions the Parliament must address are how to make the proposal available to all voters, and how to deal with the not-unlikely scenario that the creditors withdraw their proposal at Saturday's Eurogroup meeting in light of the planned referendum.

After a week of intense negotiations, the two sides have failed to come up with a mutually acceptable plan that would allow Greece to pay the International Monetary Fund its debt.